Foreclosure is a legal process where a mortgage lender, usually the bank, can own the rights to a property if the borrower has defaulted on the loan or mortgage payments. If a bank forecloses on a property, the property is then put on the market and sold, so the lender gets back the money they loaned out.
Here’s a detailed overview of the steps involved in the foreclosure process.
Borrower Defaults on Their Mortgage Payments
A borrower typically takes a loan from the bank or any other money lender and puts their house as a mortgage. They have to pay a monthly amount to the lender as a mortgage payment, and the payments continue until the borrower has successfully paid off the entire loan and its interest.
However, sometimes borrowers are unable to make the monthly mortgage payments. This could happen if they’re suffering from financial constraints due to a family emergency, recent unemployment, separation or divorce, extensive debt, etc.
Also, if a borrower has a mortgage with an adjustable-rate, any increase in the interest rates would lead to a rise in the mortgage payment as well. This higher rate could cause a borrower to default on their monthly payment.
Notice of Default Is Issued
After a borrower defaults on a payment, the lender issues a notice of default to the borrower. Usually, lenders give a grace period to borrowers, such as an extra two weeks to arrange for their payment. If the borrower cannot come up with the money within this time, they are liable to pay a late fee.
If the borrower has missed two payments, the lender issues a demand letter. If the missed payments are for three to six months, the lender goes to the County Recorder’s Office and records a default notice. From this point on, the lender has 90 days to make the recent payment and reinstate the loan.
The House Is Sold at Auction
If the borrower cannot reinstate the loan within 90 days, the lender is allowed to record a notice of trustee’s sale in the Office of the County Records. The lender then prints a notice of sale in the newspaper for exactly three weeks in a row to inform the public that the house will be sold off at an auction.
The borrower has time until five days prior to the sale in the auction to catch up on mortgage payments and prevent foreclosure. If you want to avoid foreclosure on your property, you can sell your house for cash in Ohio. Get in touch with us at Integrity Residential Solutions LLC. We buy houses in Akron, Canton, and more. Contact us today to get quick cash on the sale of your home within seven days.